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One in five students at alternative higher education colleges was not registered for a course, says NAO report

2 December 2014
| last updated: 10 December 2015

Students at alternative higher education providers have claimed taxpayer-backed financial support they were not entitled to and 20% of students were not even properly registered on a course, according to a report into alternative higher education providers released today by the National Audit Office (NAO).

The report highlights how 992 ineligible EU students were able to claim £5.4m in support before the department for business, innovation and skills (BIS) suspended payments. For-profit colleges have enjoyed phenomenal growth in recent years. The total amount of public money for students in for-profit colleges has rocketed from £42m in 2010/11 to £340m in 2012/13.

UCU general secretary, Sally Hunt, said: 'While we are pleased the misuse of public funds is finally being brought to light, we remain angry that it took so long to happen. We raised the issues of for-profit colleges' access to taxpayers' money time and again with ministers, but we were ignored at every turn.

'We look forward to BIS and the Student Loans Company explaining themselves in front of the Public Accounts Committee later this month. A quick study of what had happened in America* would have told a worrying tale of private institutions raking in state money. Future governments need to study today's report and the sector's failings when it comes to dealing with privatisation.'

The report details how, between 2012 and 2014, the department for business, innovation and skills (BIS) suspended payments to seven colleges and their students owing to concerns that they had enrolled students on to unapproved courses. It also says that dropout rates at nine alternative providers were higher than 20%. The average dropout in the rest of the higher education sector is 4%.

* UCU warned the US system that the government sought to emulate offered derisory graduation rates, crushing levels of debts and degrees of dubious value. A report from the Higher Education Policy Institute (HEPI) in July this year said that numerous negative examples from the United States should have alerted government to the dangers of giving the green light to for-profit colleges to access public funds through loans with a light-touch regulation system.